Council’s General Reserve Close To Minimum Level

That’s essentially its savings account for unexpected expenses, which is almost down to the minimum level allowed.

The Authority’s Statement of Accounts for the year ending in March 2015, published this week on their website, shows that the fund stood at just £850,000.

That’s perilously close to the £600,000 minimum advisory level and means the Council will need to stick closely to its proposed budget this year.

Back in March 2013, former Director of Finance Peter Lawrence warned that Council was in a “very difficult” financial position and said reserves would be depleted by March 2016 if the Authority continued to spend at its current rate.

At the start of the 2014 financial year, those reserves stood at just over £2m.

The decrease is largely the result of money spent to resurface the roads on St Mary’s.

There is no minimum level for reserves set by law and it’s something decided by each Local Authority and written into their rule books.

But the government advises that Councils should keep sufficient sums so that they have “a financial cushion to meet sudden unexpected costs.”

Councillors will discuss the 2014/15 accounts at the new Finance, Audit and Scrutiny Committee next Thursday.

Share this:

4 Responses to Council’s General Reserve Close To Minimum Level

Cummings July 9, 2015 at 2:59 pm

Just £850,000 left in the General Reserve account! that will be used up in a very short time, if Mr.Wilby goes to litigation.

Bertrand R July 9, 2015 at 12:26 pm

It’s a bit scaremongery this. We all know about the chance to do the roads, which was taken, and also that the airport project overspent by £600k which I assume the council will be able to claim back retrospectively.

Some councils are building them up again now, but it wasn’t too long ago that councils were being told by Eric Pickles to stop moaning and start spending their reserves!

A lot of backseat drivers in the community, just shouting and not thinking. If you’ve got a comment to share then at least show your workings. I don’t care what your name is, just show why you are saying what you are saying.

Yes it looks like they’ve been spending their reserves, so what? It’s not at critical levels, and what IS a critical level in this day and age? What eventuality are we saving up for to mitigate with the reserves? A natural disaster? An aircrash? Can’t imagine a reserve of £600k being anywhere near enough to sort that ourselves, but thankfully, it would never be a case of sorting it ourselves, the government would send agencies to help. Did Somerset council fund the clean-up of the floods and trapped communities? Dawlish storm damage, no help? Of course not.

Let’s have a good chat about this!

Andy Hargreaves July 9, 2015 at 12:45 pm

Thanks Bertrand. But Senior Finance Officer Laura Roberts has specifically pointed out the low reserves in her report which is going to Council next week. To quote, she writes…

“The General Reserve position now stands at £850,000 and is approaching the minimum advisory level of £600,000. During 2015-16 there will need to be a focus on maximising external grant funding for delivering vital services and a continued focus on cost control for all areas.

That suggests it is of concern to the Finance team.

Andy Hargreaves
Editor

Zorba the Greek July 12, 2015 at 8:23 am

This administration has burned through £1.2 MILLION pounds in fifteen months, that cannot be right. It appears that money is being spent like water…….two massive clearances of the dump yet nothing in place for a more permanent solution
(Rumour has it that each of these clearances has cost a million).
A workforce that has grown not shrunk, officers on larger and larger salaries ( the pay rises for the previous officers appear as nothing now), no improvements in water and sewerage provision, ex-employees winning legal battles……..the list goes on and on.
I fear that this council will bankrupt itself and what organization will want to pick up the pieces.
Be careful what you wish for people.